In Vietnam, electronic labour contracts (“eContracts”) have been accorded full legal validity under the Labour Code 2019, bringing significant benefits to both employees and employers, particularly enterprises with large workforces, by reducing time and costs, and enhancing efficiency in personnel management and record-keeping. However, practical implementation has revealed several challenges and obstacles. To address these issues and standardise the conditions and methods for entering into eContracts, the Ministry of Home Affairs has drafted a Decree on the conclusion and implementation of eContracts (the “Draft Decree”). The Draft Decree is currently open for public consultation, inviting comments from domestic and international authorities, organisations, and individuals.
Overview of eContracts
Article 14 of the Labour Code 2019, for the first time, recognises that a labour contract concluded via electronic means in the form of data messages, in accordance with the laws on electronic transactions, constitutes a valid form of labour contract with the same legal effect as a written contract. The legal validity of electronic contracts is further reaffirmed under Article 36 of the Law on Electronic Transactions 2023, provided that the conclusion and implementation of such electronic contracts comply with all relevant laws.
Substantively, electronic labour contracts remain agreements between employers and employees regarding paid work, wages, working conditions, and the rights and obligations of each party in the employment relationship. Building on this foundation, the Draft Decree provides clearer and more detailed regulations on the methods for concluding and performing eContracts.
Key Highlights of the Draft Decree
The Draft Decree comprises 5 chapters and 29 articles governing the conclusion and performance of electronic labour contracts, the electronic labour contract platform, and the development, management, maintenance, operation, and use of such platform.
Regulations on the Conclusion and Implementation of eContracts
As a general principle, the Draft Decree requires that the conclusion and implementation of eContracts comply with the laws on labour, electronic transactions, cybersecurity, data, personal data protection, and other relevant regulations. In addition, it introduces the principle of maximising the use of eContracts in lieu of paper-based labour contracts for internal personnel management, as well as for administrative procedures with state authorities.
The parties involved in the conclusion and implementation of eContracts include: (i) employees; (ii) employers; and (iii) third-party service providers offering software solutions for concluding and implementing eContracts. These third-party service providers act as intermediaries that support the contracting process by supplying the software used for creating, digitally signing, storing, retrieving, and managing eContracts.
With respect to the conditions and methods for concluding eContracts, the Draft Decree requires that eContracts be concluded through software that fully satisfies statutory requirements. Employers and employees must use digital signatures issued by legally licensed digital signature certification service providers to sign eContracts. This requirement ensures accurate identification of the signatory, the association of the signature with the contract data, the signatory’s control at the time of signing, and the ability to detect any post-signature alterations, thereby providing the highest level of security and legal validity.
It is worth noting that the Draft Decree introduces a new concept of a nationwide Electronic Labour Contract Platform (the “Platform”). This Platform, managed by the Ministry of Home Affairs, is defined under the Law on Electronic Transactions as a large-scale information system for electronic transactions. It is designed to centrally manage labour contract data nationwide and to provide shared services to state agencies, employers, and employees. The conclusion of eContracts must comply with prescribed technical standards, including, among others, the requirement to connect to the Platform through standard API interfaces. In addition, any eContract or paper labour contract converted into a data message must be assigned a unique identification code (“ID”) automatically generated by the Platform. This ID acts as the basis for retrieving, cross-checking, reporting, and verifying all information related to labour contracts stored on the Platform.
Regarding the validity of eContracts, the Draft Decree provides that an eContract becomes effective when the last party signs it, unless otherwise agreed by the parties. While reflecting the nature of electronic contracting, this provision is still consistent with the existing principles for determining the effective time of labour contracts under labour law and, more broadly, contracts in general under civil law.
Another notable regulation in the Draft Decree is that if the original labour contract was concluded via eContract, any subsequent amendments, supplements, suspensions, or terminations must be carried out using the same electronic method. Conversely, if the original contract was executed in paper form, it must first be converted into a data message in accordance with the Law on Electronic Transactions before it can be amended, supplemented, suspended, or terminated electronically.
Regulations on the Platform
As a new concept, the Draft Decree dedicates Chapter III to regulations on the development, updating, maintenance, operation, and use of the Platform. The Draft Decree provides three methods by which agencies, organizations, and individuals may access and use data on the Platform, including: (i) via data services offered directly on the Platform; (ii) via data connection and sharing between the Platform and national databases or other relevant databases and information systems; and (iii) via the formal written requests for information.
Other Regulations
Finally, the Draft Decree also specifies the responsibilities of ministries and local authorities within their respective functions in relation to eContract. It also stipulates the rights and obligations of third-party service providers, employers, and employees to facilitate the conclusion and implementation of eContracts, ensure the Platform operates efficiently, and maintain the accuracy, completeness, integrity, and timeliness of eContracts stored on the Platform.
Socio-Economic Impacts Anticipated Under the Draft Decree
If officially issued, the Draft Decree is expected to resolve existing legal and practical challenges in the conclusion and implementation of eContracts. In addition, it is anticipated to generate several positive socio-economic impacts, including:
- For enterprises: shortening recruitment timelines, enabling faster deployment of human resources, and enhancing operational efficiency.
- For employees: facilitating easier review of contract terms, reducing the risk of loss or misplacement of contracts, and preventing any amendments to an eContract without the employee’s consent.
- For government management: supporting the rapid and seamless synchronisation of information with the Social Insurance Authority and the Tax Authority, while providing a stronger basis for enhanced compliance with labour and tax regulations.
The Draft Decree is expected to be submitted by the Ministry of Home Affairs to the Government in the near future for review and official promulgation.
